Chainalysis Report Highlights the Rise of Approval Phishing in Crypto Frauds
Chainalysis has released a preview of its report on crypto frauds in 2024, with a focus on the explosive growth of approval phishing. This technique involves scammers tricking users into signing harmful blockchain transactions, giving them approval to spend specific tokens within their wallets and emptying the victims’ addresses. The report estimates that victims lost over $374 million in 2023 due to targeted approval phishing scams. The rise of decentralized applications (dApps) that require approval signatures for smart contracts has contributed to the growth of this type of fraud. Chainalysis suggests monitoring the blockchain and educating users to prevent falling into these scams.
The Connection Between Approval Phishing and Romance Scams
Approval phishing has seen significant growth in the last two years, and Chainalysis associates it with romance scams. Scammers use romance scam tactics to convince victims to sign approval transactions that are actually harmful. The increase in dApps that require approval signatures for smart contracts, such as Ethereum, has provided an opportunity for phishers to exploit users’ new habit of approving transactions. Investigations by Chainalysis suggest that the peak income for suspected approval phishing scammers occurred in May 2022, with an estimated $516.8 million stolen funds for the entire year.
Tips to Avoid Approval Phishing
To address the problem of crypto fraud resulting from approval phishing, Chainalysis recommends monitoring the blockchain to identify phishing suspects and associated destination addresses. The platform also emphasizes the need for industry-wide efforts to educate users about suspicious approval transactions and raise awareness about granting approvals. Phishing techniques for crypto crime attacks continue to evolve, with approval phishing being added to other methods like email campaigns.
Hot Take: Approval Phishing Adds New Dimension to Crypto Frauds
Approval phishing has emerged as a significant threat in the world of crypto frauds. Scammers are using romance scam tactics to trick users into signing harmful transactions, resulting in substantial financial losses. The growth of decentralized applications and the requirement of approval signatures for smart contracts have provided an opportunity for phishers to exploit users’ trust. To combat approval phishing, it is crucial to monitor the blockchain for suspicious activities and educate users about the risks associated with granting approvals. The crypto industry must work together to prevent falling into these traps and protect users from financial harm.
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